<PAGE> 1
Pursuant to Rule 424(b)(5)
Registration No. 33-55237
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED FEBRUARY 9, 1995
$500,000,000
FORD MOTOR CREDIT COMPANY
8.20% NOTES DUE FEBRUARY 15, 2002
------------------------
Interest on the Notes will be payable on February 15 and August 15 of each
year, commencing August 15, 1995. The Notes may not be redeemed by Ford Credit
prior to maturity.
The Notes will be represented by one or more Global Notes registered in the
name of the Depository's nominee. Interests in the Global Notes will be shown
on, and transfers thereof will be effected only through, records maintained by
the Depository and its participants. Except as described herein, Notes in
definitive form will not be issued. The Notes will trade in the Depository's
Same-Day Funds Settlement System until maturity, and secondary market trading
activity for the Notes will, therefore, settle in immediately available funds.
All payments of principal and interest will be made by Ford Credit in
immediately available funds. See "Description of Notes--Same-Day Settlement and
Payment."
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO WHICH IT RELATES.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
<TABLE>
<CAPTION>
INITIAL PUBLIC UNDERWRITING PROCEEDS TO
OFFERING PRICE(1) DISCOUNT(2) FORD CREDIT(1)(3)
---------------------------------------------------------------
<S> <C> <C> <C>
Per Note.......................... 99.983% .550% 99.433%
Total............................. $499,915,000 $2,750,000 $497,165,000
</TABLE>
- ------------
(1) Plus accrued interest, if any, from February 24, 1995.
(2) Ford Credit has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.
(3) Before deduction of estimated expenses of $200,000 to be paid by Ford
Credit.
------------------------
The Notes are offered severally by the Underwriters as specified herein,
subject to receipt and acceptance by them and subject to their right to reject
any order in whole or in part. It is expected that the Global Notes will be
ready for delivery at the office of Goldman, Sachs & Co., New York, New York, on
or about February 24, 1995.
GOLDMAN, SACHS & CO.
BEAR, STEARNS & CO. INC.
CITICORP SECURITIES, INC.
MERRILL LYNCH & CO.
PAINEWEBBER INCORPORATED
SMITH BARNEY INC.
------------------------
The date of this Prospectus Supplement is February 9, 1995.
<PAGE> 2
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVERALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES AT A
LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
DESCRIPTION OF NOTES
The following description of the particular terms of the Notes offered
hereby supplements, and to the extent inconsistent therewith replaces, the
description of the general terms and provisions of Debt Securities set forth in
the Prospectus. The Notes are part of the Debt Securities registered by Ford
Motor Credit Company ("Ford Credit") in August 1994 to be issued on terms to be
determined at the time of sale. In addition to the Notes offered hereby, Debt
Securities in the aggregate principal amount of $1,200,000,000 previously have
been sold.
GENERAL
The Notes will be limited to $500,000,000 aggregate principal amount. The
Notes will be unsecured obligations of Ford Credit and will mature on February
15, 2002. The Notes will rank pari passu with all other unsecured and
unsubordinated indebtedness of Ford Motor Credit Company (parent company only).
The Notes will bear interest from February 24, 1995 at the rate per annum
set forth on the cover page of this Prospectus Supplement, payable on February
15 and August 15 of each year, commencing August 15, 1995, to the person in
whose name the Note was registered at the close of business on the preceding
February 1 and August 1, respectively, subject to certain exceptions. The Notes
are not subject to redemption prior to maturity.
BOOK-ENTRY, DELIVERY AND FORM
The Notes will be issued in the form of one or more fully registered Global
Notes (the "Global Notes") which will be deposited with, or on behalf of, The
Depository Trust Company, New York, New York (the "Depository") and registered
in the name of Cede & Co., the Depository's nominee. Except as set forth below,
the Global Notes may be transferred, in whole and not in part, only to another
nominee of the Depository or to a successor of the Depository or its nominee.
The Depository has advised as follows: It is a limited-purpose trust
company which holds securities for its participating organizations (the
"Participants") and facilitates the settlement among Participants of securities
transactions in such securities through electronic book-entry changes in its
Participants' accounts. Participants include securities brokers and dealers
(including certain of the Underwriters), banks and trust companies, clearing
corporations and certain other organizations. Access to the Depository's system
is also available to others such as banks, brokers, dealers and trust companies
that clear through or maintain a custodial relationship with a Participant,
either directly or indirectly ("indirect participants"). Persons who are not
Participants may beneficially own securities held by the Depository only through
Participants or indirect participants.
The Depository advises that its established procedures provide that (i)
upon issuance of the Notes by Ford Credit the Depository will credit the
accounts of Participants designated by the Underwriters with the principal
amounts of the Notes purchased by the Underwriters, and (ii) ownership of
interests in the Global Notes will be shown on, and the transfer of that
ownership will be effected only through, records maintained by the Depository,
the Participants and the indirect participants. The laws of some states require
that certain persons take physical delivery in definitive form of securities
which they own. Consequently, the ability to transfer beneficial interests in
the Global Notes is limited to such extent.
So long as a nominee of the Depository is the registered owner of the
Global Notes, such nominee for all purposes will be considered the sole owner or
holder of such Notes under the
S-2
<PAGE> 3
Indenture. Except as provided below, owners of beneficial interests in the
Global Notes will not be entitled to have Notes registered in their names, will
not receive or be entitled to receive physical delivery of Notes in definitive
form, and will not be considered the owners or holders thereof under the
Indenture.
Neither Ford Credit, the Trustee, any Paying Agent nor the Security
Registrar will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in the Global Notes, or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.
Principal and interest payments on the Notes registered in the name of the
Depository's nominee will be made by the Trustee to the Depository. Under the
terms of the Indenture, Ford Credit and the Trustee will treat the persons in
whose names the Notes are registered as the owners of such Notes for the purpose
of receiving payment of principal and interest on the Notes and for all other
purposes whatsoever. Therefore, neither Ford Credit, the Trustee nor any Paying
Agent has any direct responsibility or liability for the payment of principal or
interest on the Notes to owners of beneficial interests in the Global Notes. The
Depository has advised Ford Credit and the Trustee that its present practice is
to credit the accounts of the Participants on the appropriate payment date in
accordance with their respective holdings in principal amount of beneficial
interests in the Global Notes as shown on the records of the Depository, unless
the Depository has reason to believe that it will not receive payment on such
payment date. Payments by Participants and indirect participants to owners of
beneficial interests in the Global Notes will be governed by standing
instructions and customary practices, as is now the case with securities held
for the accounts of customers in bearer form or registered in "street name," and
will be the responsibility of the Participants or indirect participants.
If the Depository is at any time unwilling or unable to continue as
depository and a successor depository is not appointed by Ford Credit within 90
days, Ford Credit will issue Notes in definitive form in exchange for the Global
Notes. In addition, Ford Credit may at any time determine not to have the Notes
represented by Global Notes and, in such event, will issue Notes in definitive
form in exchange for the Global Notes. In either instance, an owner of a
beneficial interest in the Global Notes will be entitled to have Notes equal in
principal amount to such beneficial interest registered in its name and will be
entitled to physical delivery of such Notes in definitive form. Notes so issued
in definitive form will be issued in denominations of $1,000 and integral
multiples thereof and will be issued in registered form only, without coupons.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Notes will be made by the Underwriters in immediately
available funds. All payments of principal and interest will be made by Ford
Credit in immediately available funds.
Secondary trading in long-term notes and debentures of corporate issuers is
generally settled in clearing-house or next-day funds. In contrast, the Notes
will trade in the Depository's Same-Day Funds Settlement System until maturity,
and secondary market trading activity in the Notes will therefore be required by
the Depository to settle in immediately available funds. No assurance can be
given as to the effect, if any, of settlement in immediately available funds on
trading activity in the Notes.
S-3
<PAGE> 4
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement
and the Pricing Agreement relating to the Notes, Ford Credit has agreed to sell
to each of the underwriters named below (the "Underwriters") and each of the
Underwriters, for whom Goldman, Sachs & Co. are acting as representatives, has
severally agreed to purchase the principal amount of Notes set forth opposite
its name below.
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
UNDERWRITER OF NOTES
--------------------------------------------------------- -------------
<S> <C>
Goldman, Sachs & Co. .................................... $ 83,375,000
Bear, Stearns & Co. Inc. ................................ 83,325,000
Citicorp Securities, Inc. ............................... 83,325,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated................................ 83,325,000
PaineWebber Incorporated................................. 83,325,000
Smith Barney Inc. ....................................... 83,325,000
-------------
Total............................................... $ 500,000,000
=============
</TABLE>
In the event of default by one or more Underwriters, the Underwriting
Agreement provides that in certain circumstances other Underwriters may be
substituted or the commitment of each non-defaulting Underwriter may be
increased up to 10%. However, if the default involves more than one-eleventh of
the aggregate principal amount of the Notes, the Pricing Agreement relating to
the Notes may be terminated by Ford Credit or by 50% or more in interest of
non-defaulting Underwriters, or, if not so terminated, less than all the Notes
may be sold.
The Underwriters have advised Ford Credit that they propose to offer all or
part of the Notes directly to retail purchasers at the initial public offering
price set forth on the cover page of this Prospectus Supplement, and to certain
securities dealers at such price less a concession of .350% of the principal
amount of the Notes. The Underwriters may allow and such dealers may reallow to
certain brokers and dealers a concession not in excess of .250% of the principal
amount of the Notes. After the Notes are released for sale to the public, the
offering price and other selling terms may from time to time be varied by the
Underwriters.
Ford Credit does not intend to apply for listing of the Notes on a national
securities exchange, but has been advised by the Underwriters that they intend
to make a market in the Notes. The Underwriters are not obligated, however, to
make a market in the Notes and may discontinue market-making at any time without
notice. No assurance can be given as to the liquidity of the trading market for
the Notes.
All secondary trading in the Notes will settle in immediately available
funds. See "Description of Notes -- Same-Day Settlement and Payment."
Ford Credit has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.
------------------------
The following information, which is being disclosed pursuant to Florida
law, is accurate as of the date of this Prospectus Supplement:
Autolatina-Comercio, Negocios e Participacoes Ltda., a Brazilian company
("Autolatina"), is a joint venture between Ford Motor Company ("Ford") and
Volkswagen AG in which Ford has a 49% ownership interest. Autolatina
occasionally sells vehicles to persons located in Cuba. Each such sale is made
pursuant to a specific license granted to Ford by the U.S. Department of
Treasury. The last such sale, which involved one medical supply vehicle, was
made to Cubanacan in April 1991. Current information concerning Autolatina's or
its Ford-related affiliates' business dealings with the government of Cuba or
with persons located in Cuba may be obtained from the State of Florida
Department of Banking and Finance at The Capitol Building, Suite 1401,
Tallahassee, Florida 32399-0350 (telephone number 940-488-0545).
S-4
<PAGE> 5
FORD MOTOR CREDIT COMPANY
DEBT SECURITIES
Ford Credit, in August 1994, registered with the Securities and Exchange
Commission $6,000,000,000 aggregate principal amount of its Debt Securities
consisting of notes and/or debentures denominated in United States dollars or
any other currency or currencies, to be offered from time to time in one or more
series, on terms to be determined at or prior to the time of sale. The
Prospectus Supplement accompanying this Prospectus sets forth, with respect to
the particular series of Debt Securities for which this Prospectus and the
Prospectus Supplement are being delivered, the specific title, the aggregate
principal amount, the authorized denominations, the currencies of issue and
payment, the initial public offering price, the maturity, the interest rate or
rates (which may be either fixed or variable), if any, and/or method of
determination thereof, the time of payment of any interest, any redemption,
extension or early repayment terms, any provision for sinking fund payments, the
net proceeds to Ford Credit, the form of Debt Securities and other specific
terms relating to such series of Debt Securities.
Ford Credit may sell the Debt Securities to or through underwriters, and
also may sell the Debt Securities directly to other purchasers or through
agents. See "Plan of Distribution". In addition, the Debt Securities may be sold
to dealers at the applicable price to the public set forth in the Prospectus
Supplement relating to a particular series of Debt Securities who later resell
to investors. Such dealers may be deemed to be "underwriters" within the meaning
of the Securities Act of 1933, as amended (the "Securities Act"). If any agents
of Ford Credit, or any underwriters, are involved in the sale of any Debt
Securities, the names of such agents or underwriters and any applicable
commissions or discounts are set forth in the accompanying Prospectus
Supplement.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS FEBRUARY 9, 1995
<PAGE> 6
AVAILABLE INFORMATION
FORD MOTOR CREDIT COMPANY ("FORD CREDIT") AND FORD MOTOR COMPANY ARE
SUBJECT TO THE INFORMATIONAL REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934
AND IN ACCORDANCE THEREWITH FILE REPORTS AND OTHER INFORMATION WITH THE
SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION"). AS USED HEREIN OR IN THE
PROSPECTUS SUPPLEMENT, "FORD" REFERS TO FORD MOTOR COMPANY AND ITS SUBSIDIARIES
UNLESS THE CONTEXT OTHERWISE REQUIRES. SUCH REPORTS AND OTHER INFORMATION CAN BE
INSPECTED AND COPIED AT THE PUBLIC REFERENCE FACILITIES MAINTAINED BY THE
COMMISSION AT 450 FIFTH STREET, N.W., WASHINGTON, D.C. 20549 AND AT THE
FOLLOWING REGIONAL OFFICES OF THE COMMISSION: 7 WORLD TRADE CENTER, 13TH FLOOR,
NEW YORK, NEW YORK 10048 AND NORTHWEST ATRIUM CENTER, 500 WEST MADISON STREET,
SUITE 1400, CHICAGO, ILLINOIS 60661. COPIES OF SUCH MATERIAL CAN BE OBTAINED
FROM THE PUBLIC REFERENCE SECTION OF THE COMMISSION AT 450 FIFTH STREET, N.W.,
WASHINGTON, D.C. 20549 AT PRESCRIBED RATES. SUCH REPORTS AND OTHER INFORMATION
CONCERNING FORD CREDIT AND FORD CAN ALSO BE INSPECTED AT THE OFFICES OF THE NEW
YORK STOCK EXCHANGE, INC., 20 BROAD STREET, NEW YORK, NEW YORK 10005, ON WHICH
CERTAIN OF FORD CREDIT'S DEBT SECURITIES ARE LISTED.
Ford Credit has filed with the Commission a Registration Statement under
the Securities Act with respect to the Debt Securities offered hereby. This
Prospectus and the Prospectus Supplement do not contain all the information set
forth in the Registration Statement and the exhibits and schedules thereto,
certain portions of which have been omitted pursuant to the rules and
regulations of the Commission. The information so omitted may be obtained from
the Commission's principal office in Washington, D.C. upon payment of the fees
prescribed by the Commission.
------------------------
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Ford Credit's Annual Report on Form 10-K for the year ended December 31,
1993 (the "1993 10-K Report"), Ford Credit's Quarterly Reports on Form 10-Q for
the quarters ended March 31, 1994 (the "First Quarter 10-Q Report"), June 30,
1994 (the "Second Quarter 10-Q Report"), and September 30, 1994 (the "Third
Quarter 10-Q Report") and Ford Credit's Current Reports on Form 8-K dated
January 11, 1994, February 11, 1994, February 25, 1994, March 18, 1994, April
14, 1994, May 11, 1994, June 27, 1994, August 22, 1994, October 17, 1994,
October 31, 1994, December 9, 1994 and January 17, 1995 are incorporated in this
Prospectus by reference. All documents filed by Ford Credit pursuant to Section
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 after the date
of this Prospectus and prior to the termination of the offering of the Debt
Securities shall be deemed to be incorporated by reference into this Prospectus
and to be a part hereof from the date of filing such documents. Such reports
include, and such documents may include, information concerning Ford, as well as
Ford Credit.
FORD CREDIT UNDERTAKES TO PROVIDE WITHOUT CHARGE TO EACH PERSON, INCLUDING
ANY BENEFICIAL OWNER, TO WHOM A COPY OF THIS PROSPECTUS AND THE PROSPECTUS
SUPPLEMENT HAVE BEEN DELIVERED, ON THE WRITTEN OR ORAL REQUEST OF ANY SUCH
PERSON, A COPY OF ANY OR ALL OF THE DOCUMENTS REFERRED TO ABOVE WHICH HAVE BEEN
OR MAY BE INCORPORATED BY REFERENCE IN THIS PROSPECTUS AND THE PROSPECTUS
SUPPLEMENT, OTHER THAN EXHIBITS TO SUCH DOCUMENTS. WRITTEN OR TELEPHONIC
REQUESTS FOR SUCH DOCUMENTS SHOULD BE DIRECTED TO FORD MOTOR CREDIT COMPANY, THE
AMERICAN ROAD, DEARBORN, MICHIGAN 48121, ATTENTION: PUBLIC AFFAIRS DEPARTMENT
(TELEPHONE 313-594-1096).
------------------------
2
<PAGE> 7
INFORMATION CONCERNING FORD CREDIT
Ford Credit was incorporated in Delaware in 1959 and is a wholly-owned
subsidiary of Ford. As used herein "Ford Credit" refers to Ford Motor Credit
Company and its subsidiaries unless the context otherwise requires.
Ford Credit provides wholesale financing and capital loans to franchised
Ford Motor Company vehicle dealers and other dealers associated with such
dealers and purchases retail installment sale contracts and retail leases from
them. Ford Credit also makes loans to vehicle leasing companies, the majority of
which are affiliated with such dealers. In addition, wholly-owned subsidiaries
of Ford Credit provide these financing services to other vehicle dealers. More
than 85% of all new vehicles financed by Ford Credit are manufactured by Ford or
its affiliates. In addition to vehicle financing, Ford Credit makes loans to
affiliates of Ford, finances certain receivables of Ford and its subsidiaries,
and offers diversified financing services which are managed by USL Capital
Corporation ("USL Capital"), a wholly-owned subsidiary of Ford Holdings, Inc.
("Ford Holdings"). Ford Credit also manages the insurance business of The
American Road Insurance Company ("American Road"), a wholly-owned subsidiary of
Ford Holdings. Ford Credit also is a significant equity participant in Ford
Holdings whose primary activities are consumer and commercial financing
operations, insurance underwriting and equipment leasing.
The mailing address of Ford Credit's executive offices is The American
Road, Dearborn, Michigan 48121. The telephone number of such offices is (313)
322-3000.
------------------------
THIS PROSPECTUS CONTAINS BRIEF SUMMARIES OF CERTAIN MORE DETAILED
INFORMATION CONTAINED IN DOCUMENTS INCORPORATED HEREIN BY REFERENCE. SUCH
SUMMARIES ARE QUALIFIED IN THEIR ENTIRETY BY THE DETAILED INFORMATION CONTAINED
IN THE INCORPORATED DOCUMENTS.
------------------------
3
<PAGE> 8
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
SELECTED FINANCIAL DATA
(DOLLAR AMOUNTS IN MILLIONS)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
-----------------------------------
1994 1993 1992
--------- --------- ---------
<S> <C> <C> <C>
INCOME STATEMENT DATA
Total revenue......................................... $10,389.3 $ 8,338.4 $ 7,073.3
Interest expense...................................... 3,540.8 2,919.3 3,076.5
Provision for credit losses........................... 246.5 270.2 418.0
Income before income taxes and cumulative effects of
changes in accounting principles................... 1,999.1 1,875.0 1,323.2
Cumulative effects of changes in accounting
principles......................................... -- -- 146.5
Net income............................................ 1,312.7 1,193.8 1,038.7
Dividends
Cash............................................... (364.0) (250.0) (600.0)
Stock of Ford Holdings............................. -- -- (200.0)
Memo:
Net credit losses amount.............................. $ 228.7 $ 228.4 $ 342.6
As percentage of average total finance receivables
outstanding*....................................... 0.30% 0.35% 0.60%
BALANCE SHEET DATA
Net investment, operating
leases............................................. $19,993.9 $12,600.9 $ 7,747.2
========= ========= =========
Finance receivables, net.............................. $56,946.5 $50,759.2 $46,602.5
========= ========= =========
Capital
Short-term debt.................................... $34,364.9 $25,507.1 $22,995.7
Long-term debt (including current portion)......... 36,075.5 33,291.6 26,960.7
Stockholder's equity............................... 6,662.6 5,774.7 4,882.9
--------- --------- ---------
Total capital.................................... $77,103.0 $64,573.4 $54,839.3
========= ========= =========
</TABLE>
- ---------------
* Includes net investment in operating leases.
RESULTS OF OPERATIONS
1994 Compared with 1993
Ford Credit's consolidated net income in 1994 was $1,313 million, up $119
million or 10% from 1993. Net income from financing operations in 1994 was
$1,080 million, up $84 million or 8% from 1993. The increase in financing
profits was more than accounted for by higher financing volumes, a one-time gain
from the sale of Ford Credit's investment in Manheim Auctions, the
non-recurrence of the effect of the 1993 U.S. tax rate increase, gains on used
service vehicles and repurchased fleet-account vehicles sold at auction,
improved credit losses and improved operating costs. Lower net interest margins
and lower gains from sales of receivables were a partial offset.
Continuing the trend of favorable credit loss experience, credit losses as
a percent of average finance receivables including net investment in operating
leases were 0.30% in 1994 ($228 million) compared with 0.35% in 1993 ($228
million). The credit loss coverage ratio for 1994 was 4.0, the same as the prior
year. The decline in net interest margins reflects the lower portfolio yields on
finance receivables and net investment in operating leases, and an increase in
net U.S. portfolio borrowing rates from 5.3% in 1993 to 5.4% in 1994.
4
<PAGE> 9
For 1994, equity in net income of affiliated companies (primarily Ford
Holdings) was $233 million compared with $198 million last year. The increase
reflected higher Ford Holdings net income available to common shareholders. At
December 31, 1994, Ford Credit owned about 45% of Ford Holdings common stock,
representing about 34% of the voting power.
Total gross finance receivables and net investment in operating leases at
December 31, 1994 were $82.8 billion, up $13.6 billion or 20% from a year
earlier. The higher financing volume reflects primarily an increase in
short-term operating leases and higher wholesale receivables. Depreciation
expense in 1994 was $3,910 million, up $1,234 million or 46% from 1993. The
increase reflected the higher levels of operating leases and was more than
offset by higher revenue earned on the lease contracts.
For 1994, Ford Credit financed 36.6% of all new cars and trucks sold by
Ford Motor Company dealers in the U.S. compared with 38.5% in 1993. The decrease
primarily resulted from lower levels of daily rental car financing. Ford Credit
provided retail customers with financing for 2,347,000 new and used vehicles in
the United States. Ford Credit provided wholesale financing for a record 81.5%
of Ford Motor Company U.S. factory sales in 1994 compared with 81.4% in 1993.
1993 Compared with 1992
Ford Credit's consolidated net income in 1993 was $1,194 million, up $155
million or 15% from 1992. Excluding a one-time gain resulting from the net
effect of the adoption of new accounting standards for income taxes and
postretirement benefits in 1992, net income was up $302 million or 34% from the
prior year. The following comparison of 1993 results with 1992 results excludes
the one-time net gain associated with the accounting changes.
Net income from financing operations was $996 million, up $259 million or
35% from the prior year. The increase in financing profits was more than
accounted for by higher financing volumes, lower credit losses and higher net
income from gains on sales of retail automotive receivables, partially offset by
the increase in U.S. income taxes and lower net interest margins.
Lower credit losses reflect lower losses per repossession and fewer
repossessions. Actual credit losses were $228 million (0.35% of average finance
receivables including net investments in operating leases) compared with $343
million (0.60%) in 1992. The credit loss coverage ratio for 1993 was 4.0
compared with 2.7 in the prior year. The decline in net interest margins,
including depreciation on operating leases, reflects primarily the decline in
net U.S. borrowing rates from 6.3% in 1992 to 5.3% in 1993, more than offset by
lower yields on finance receivables and net investment in operating leases.
For 1993, equity in net income of affiliated companies (primarily Ford
Holdings) was $198 million, up $43 million from 1992. The increase reflected
higher Ford Holdings net income available to common shareholders, partially
offset by a reduction in Ford Credit's ownership of Ford Holdings common stock.
The reduction in ownership was the result of a dividend paid in 1992 to Ford in
the form of Ford Holdings common stock. At December 31, 1993, Ford Credit owned
about 45% of Ford Holdings common stock, representing about 34% of the voting
power.
Total gross finance receivables and net investment in operating leases at
December 31, 1993 were $69.2 billion, up $9.6 billion (16%) from a year earlier.
The higher financing volume reflects primarily an increase in short-term
operating leases and higher wholesale receivables. Depreciation expense on
operating leases in 1993 was $2,676 million, up $1,023 million or 62% from 1992.
The increase reflected the higher levels of operating leases and was more than
offset by higher revenue earned on the lease contracts.
For 1993, Ford Credit financed 38.5% of all new cars and trucks sold by
Ford Motor Company dealers in the U.S. compared with 37.7% in 1992. Ford Credit
provided retail financing for 2,246,000 new and used vehicles in the United
States. Ford Credit provided wholesale financing for 81.4% of Ford Motor Company
U.S. factory sales in 1993 compared with 77.6% in 1992.
5
<PAGE> 10
LIQUIDITY AND CAPITAL RESOURCES
Ford Credit relies heavily on its ability to raise substantial amounts of
funds. These funds are obtained primarily by sales of commercial paper and
issuance of term debt. Funds also are provided by retained earnings and sales of
receivables. The level of funds can be affected by certain transactions with
Ford, such as capital contributions, interest supplements and other support
costs from Ford for vehicles financed and leased by Ford Credit under Ford
sponsored special financing and leasing programs, and dividend payments, and the
timing of payments for the financing of dealers' wholesale inventories and for
income taxes. Ford Credit's ability to obtain funds is affected by its debt
ratings, which are closely related to the outlook for, and financial condition
of, Ford, and the nature and availability of support facilities, such as
revolving credit and receivables sales agreements. In addition, Ford Credit from
time to time sells its receivables in public offerings or private placements.
For additional information regarding liquidity and capital resources, see Item
1--Business--"Business of Ford Credit--Borrowings and Other Sources of Funds" in
the 1993 10-K Report, and see the First Quarter 10-Q Report, the Second Quarter
10-Q Report and the Third Quarter 10-Q Report. For additional information
regarding Ford Credit's association with Ford, see Item 1 --Business--"Certain
Transactions with Ford and Affiliates" in the 1993 10-K Report.
On December 31, 1994, Ford Credit declared a $114 million cash dividend
payable to Ford.
6
<PAGE> 11
INFORMATION CONCERNING FORD
Ford is the second-largest producer of cars and trucks in the world, and
ranks among the largest providers of financial services in the United States.
Ford's two principal business segments are Automotive and Financial
Services. The activities of the Automotive segment consist of the manufacture,
assembly and sale of cars and trucks and related parts and accessories. The
Financial Services segment is comprised of the following subsidiaries: Ford
Credit, Ford Credit Europe plc, Ford Holdings, Associates First Capital
Corporation ("The Associates"), American Road, The Hertz Corporation ("Hertz")
and USL Capital. The activities of these subsidiaries include financing
operations, insurance operations and vehicle and equipment leasing.
7
<PAGE> 12
SELECTED FINANCIAL DATA AND OTHER DATA OF FORD
The following table sets forth selected financial data and other data
concerning Ford:
<TABLE>
<CAPTION>
YEARS ENDED OR AT DECEMBER 31
-----------------------------------------------------
1994 1993 1992 1991 1990
-------- -------- -------- --------- --------
(IN MILLIONS EXCEPT PER SHARE AND UNIT SALES AMOUNTS)
<S> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF INCOME INFORMATION
Automotive
Sales.............................................. $107,137 $ 91,568 $ 84,407 $ 72,051 $ 81,844
Operating income/(loss)............................ 5,826 1,432 (1,775) (3,769) 316
Income/(loss) before cumulative effects of changes
in accounting principles......................... 3,824 940 (1,534) (3,186) 99
Financial Services Revenues.......................... 21,302 16,953 15,725 16,235 15,806
Income before income taxes and cumulative effects
of changes in accounting principles.............. 2,792 2,712 1,825 1,465 1,221
Income before cumulative effects of changes in
accounting principles............................ 1,484 1,589 1,032 928 761
Total Ford
Income/(loss) before cumulative effects of changes
in accounting principles......................... 5,308 2,529 (502) (2,258) 860
Cumulative effects of changes in accounting
principles....................................... -- -- (6,883) -- --
Net income/(loss).................................. 5,308 2,529 (7,385) (2,258) 860
Amounts Per Share of Common Stock and Class B Stock
After Preferred Stock Dividends***
Income/(loss) before cumulative effects of changes
in accounting principles......................... 4.97 2.27 (0.73) (2.40) 0.93
Cumulative effects of changes in accounting
principles....................................... -- -- (7.08) -- --
-------- -------- -------- --------- --------
Income/(loss) assuming no dilution................. 4.97 2.27 (7.81) (2.40) 0.93
Income/(loss) assuming full dilution............... 4.44 2.10 (7.81) (2.40) 0.92
Cash dividends..................................... 0.91 0.80 0.80 0.98 1.50
CONSOLIDATED BALANCE SHEET INFORMATION
Automotive
Total assets....................................... 68,371 61,737 57,170 52,397 50,823
Debt payable within one year....................... 155 932 1,249 2,580 2,849
Long-term debt--noncurrent portion................. 7,103 7,084 7,068 6,539 4,553
Financial Services
Total assets....................................... 150,983 137,201 123,375 122,032 122,839
Debt............................................... 123,713 103,960 90,188 88,295 88,117
Deposit accounts*.................................. -- 10,549 14,030 16,882 17,893
Total Ford
Total assets....................................... 219,354 198,938 180,545 174,429 173,663
Debt (incl. deposit accounts)...................... 130,971 122,525 112,535 114,296 113,412
Stockholders' equity**............................. 21,659 15,574 14,753 22,690 23,238
Cash dividends..................................... 1,205 1,086 977 927 1,389
OTHER DATA
Total Ford
Capital expenditures............................... 8,546 6,814 5,790 5,847 7,258
Depreciation and amortization of special tools..... 9,336 7,468 6,755 5,778 4,880
Worldwide factory unit sales
of cars, trucks and tractors
(in thousands)................................... 6,639 5,965 5,764 5,359 5,872
</TABLE>
- ------------
* Deposit accounts relate to First Nationwide.
** The cumulative effects of changes in accounting principles reduced equity
by $6,883 million in 1992.
*** Share data have been restated to reflect the 2-for-1 stock split that
became effective June 6, 1994.
8
<PAGE> 13
FINANCIAL REVIEW OF FORD
1994 RESULTS OF OPERATIONS
Overview
Ford's worldwide net income in 1994 was $5,308 million, or $4.97 per share
of Common and Class B Stock, compared with earnings of $2,529 million, or $2.27
per share in 1993. Fully diluted earnings per share were $4.44, compared with
$2.10 a year ago. Sales and revenues totaled $128.4 billion in 1994, up 18% from
1993. Factory unit sales of cars and trucks were 6,639,000, up 674,000 or 11%.
On June 6, 1994, a 2-for-1 stock split in the form of a 100% stock dividend
on Ford's outstanding Common and Class B Stock became effective. Earnings per
share for prior periods have been restated to reflect the stock split.
Automotive Operations
Ford's worldwide Automotive operations earned $3,824 million in 1994,
compared with $940 million in 1993. In the U.S., Ford's Automotive operations
earned $3,040 million, compared with $1,482 million a year ago. Outside the
U.S., Ford's Automotive operations earned $784 million for 1994, compared with a
loss of $542 million a year ago.
Financial Services Operations
Ford's Financial Services operations earned $1,484 million in 1994, down
$105 million from 1993. The decline was more than explained by the charge to net
income of $440 million related to the disposition of First Nationwide Bank, now
known as Granite Savings Bank. Ford Credit's consolidated net income was $1,313
million in 1994 compared with $1,194 million a year ago. The Associates earned
$548 million in 1994, compared with $470 million in 1993. USL Capital's net
income in 1994 was $109 million, compared with $77 million in 1993. In April
1994, Hertz became a wholly-owned subsidiary of Ford. In 1994, Financial
Services net income included $92 million for Hertz. In 1993, Automotive net
income included $26 million for Hertz (reflecting Ford's prior equity interest).
LIQUIDITY AND CAPITAL RESOURCES
Cash and marketable securities of Ford's Automotive operations were $12.1
billion at December 31, 1994, up $2.3 billion from December 31, 1993. During
1994, Ford paid $1.2 billion in cash dividends on its capital stock and
contributed $1.7 billion to its U.S. pension plans and $300 million to its
non-U.S. pension plans.
Automotive capital expenditures were $8.3 billion in 1994, compared with
$6.7 billion a year ago.
Automotive debt at December 31, 1994 totaled $7.3 billion, which was 25% of
total capitalization (stockholders' equity and Automotive debt), compared with
$8.0 billion, or 34% of total capitalization, at year-end 1993.
FOURTH QUARTER 1994 RESULTS OF OPERATIONS
Overview
Ford's worldwide net income was $1,569 million, or $1.47 per share of
Common and Class B Stock, in the fourth quarter of 1994, compared with $719
million or $0.65 per share in the fourth quarter of 1993. Fully diluted earnings
per share were $1.31 in the fourth quarter of 1994, compared with $0.60 a year
ago. Ford's worldwide sales and revenues were $33.6 billion, up $5.8 billion
from a year ago. Worldwide factory unit sales of cars and trucks were 1,646,000,
up 193,000 units or 13%.
Ford's worldwide Automotive operations earned $1,085 million in the fourth
quarter of 1994, compared with $297 million a year ago.
9
<PAGE> 14
In the U.S., Ford's Automotive operations earned $720 million, compared
with $669 million a year ago.
Outside the U.S., Automotive operations earned $365 million in the fourth
quarter of 1994, compared with a loss of $372 million a year ago. Net income
outside of the U.S. included a one-time gain from the recent devaluation of the
Mexican peso. However, the devaluation is expected to have an unfavorable impact
on future earnings.
Ford's Financial Services operations earned $484 million in the fourth
quarter of 1994, compared with $422 million in 1993.
RECENT DEVELOPMENTS
Ford and Volkswagen AG have agreed on a separation process leading toward
dissolution of their Autolatina joint venture in Brazil and Argentina within a
year. It is not known at this time what effect, if any, a dissolution of
Autolatina will have on Ford's earnings. Historically, Autolatina has
represented a significant portion of Ford's Automotive earnings outside of the
U.S. and Europe.
INDUSTRY DATA AND MARKET SHARE OF FORD
The following table shows the U.S. industry retail deliveries of cars and
trucks for the years indicated:
<TABLE>
<CAPTION>
U.S. INDUSTRY RETAIL DELIVERIES
(MILLIONS OF UNITS)
----------------------------------------
YEARS ENDED DECEMBER 31
----------------------------------------
1994 1993 1992 1991 1990
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Cars..................................................... 9.0 8.5 8.2 8.2 9.3
Trucks................................................... 6.4 5.7 4.9 4.3 4.8
</TABLE>
The following table shows Ford's U.S. car and truck market shares for the
years indicated:
<TABLE>
<CAPTION>
FORD U.S. CAR AND TRUCK MARKET SHARES
----------------------------------------
YEARS ENDED DECEMBER 31
----------------------------------------
1994 1993 1992 1991 1990
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Cars*................................................ 21.8% 22.3% 21.8% 20.1% 21.1%
Trucks............................................... 30.1 30.4 29.7 28.9 29.3
</TABLE>
- ------------
* Includes Jaguar sales since 1990.
For additional information regarding Ford, see the 1993 10-K Report, the
First Quarter 10-Q Report, the Second Quarter 10-Q Report, and the Third Quarter
10-Q Report.
USE OF PROCEEDS
Except as otherwise provided in the Prospectus Supplement, the net proceeds
from the sale of the Debt Securities will be added to the general funds of Ford
Credit and will be available for the purchase of receivables, for loans and for
use in connection with the retirement of debt. Such proceeds initially may be
used to reduce short-term borrowings (commercial paper, borrowings under bank
lines of credit and borrowings under agreements with bank trust departments) or
may be invested temporarily in short-term securities.
Ford Credit expects to issue additional long-term and short-term debt from
time to time. The nature and amount of Ford Credit's long-term and short-term
debt and the proportionate amount of each can be expected to vary from time to
time, as a result of business requirements, market conditions and other factors.
10
<PAGE> 15
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of "earnings" to "fixed charges" for Ford Credit and Ford were as
follows for the first nine months of 1994 and 1993 and each of the years
1989-1993:
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
SEPTEMBER 30 YEARS ENDED DECEMBER 31
------------- ----------------------------------------
1994 1993 1993 1992 1991 1990 1989
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Ford Motor Credit Company................ 1.53 1.58 1.56 1.37 1.23 1.14 1.13
Ford Motor Company....................... 2.1 1.5 1.5 * ** 1.2 1.7
</TABLE>
- ------------
* Earnings were inadequate to cover fixed charges by $237 million.
** Earnings were inadequate to cover fixed charges by $2,664 million.
For purposes of the Ford Credit ratio, "earnings" consist of income before
income taxes and cumulative effects of changes in accounting principles and
fixed charges. Income before income taxes and cumulative effects of changes in
accounting principles of Ford Credit excludes the equity in net income of all
unconsolidated affiliates and minority interest in net income of subsidiaries.
"Fixed charges" consist of interest on borrowed funds, amortization of debt
discount, premium, and issuance expense and one-third of all rental expense (the
proportion deemed representative of the interest factor).
For purposes of the Ford ratio, "earnings" include the profit/(loss) before
income taxes and cumulative effects of changes in accounting principles of Ford
and its majority-owned subsidiaries, whether or not consolidated, its
proportionate share of any fifty-percent-owned companies, and any income
received from less-than-fifty-percent-owned companies and fixed charges. "Fixed
charges" consist of interest on borrowed funds, preferred stock dividend
requirements of majority-owned subsidiaries, amortization of debt discount,
premium, and issuance expense, and one-third of all rental expense (the
proportion deemed representative of the interest factor).
DESCRIPTION OF DEBT SECURITIES
The Debt Securities are to be issued in one or more series under an
Indenture dated as of August 1, 1994, as supplemented from time to time (the
"Indenture"), between Ford Credit and First Fidelity Bank, National Association
("First Fidelity"), Trustee. The term "Trustee", as used herein, shall mean
First Fidelity and, if at any time there is more than one Trustee acting under
the Indenture, the term "Trustee" as used herein with respect to Indenture
Securities (as defined below) of any particular series shall mean the Trustee
with respect to the Indenture Securities of such series. The following
statements with respect to the Debt Securities are subject to the detailed
provisions of the Indenture, the form of which is filed as an exhibit to the
Registration Statement. Parenthetical references below are to the Indenture or
the Form of Security contained therein and, whenever any particular provision of
the Indenture or any term used therein is referred to, such provision or term is
incorporated by reference as a part of the statement in connection with which
such reference is made, and the statement in connection with which such
reference is made is qualified in its entirety by such reference.
The particular terms of each series of Debt Securities, as well as any
modification or addition to the general terms of the Debt Securities as herein
described, which may be applicable to a particular series of Debt Securities,
are described in the Prospectus Supplement relating to such series of Debt
Securities and will be set forth in a filing with the Commission. Accordingly,
for a description of the terms of a particular series of Debt Securities,
reference must be made to the Prospectus Supplement relating to such series and
to the description of Debt Securities set forth in this Prospectus.
11
<PAGE> 16
GENERAL
The Debt Securities offered hereby will be limited to $6,000,000,000
aggregate principal amount or the equivalent thereof in any currency, although
the Indenture provides that additional debt securities may be issued thereunder
up to the aggregate principal amount, which is not limited by the Indenture,
authorized from time to time by Ford Credit's Board of Directors. So long as a
single Trustee is acting for the benefit of the holders of all the Debt
Securities offered hereby and any such
additional debt securities issued under the Indenture, the Debt Securities and
any such additional debt securities are herein collectively referred to as the
"Indenture Securities". The Indenture also provides that there may be more than
one Trustee under the Indenture, each with respect to one or more different
series of Indenture Securities. See also "Trustee" herein. At any time when two
or more Trustees are acting, each with respect to only certain series, the term
"Indenture Securities" as used herein shall mean the one or more series with
respect to which each respective Trustee is acting and the powers and trust
obligations of each such Trustee as described herein shall extend only to the
one or more series of Indenture Securities for which it is acting as Trustee.
The effect of the provisions contemplating that there might be more than one
Trustee acting for different series of Indenture Securities is that, in that
event, those Indenture Securities (whether of one or more than one series) for
which each Trustee is acting would be treated as if issued under a separate
indenture.
The Prospectus Supplement which accompanies this Prospectus sets forth a
description of the particular series of Debt Securities being offered thereby,
including: (1) the designation or title of such Debt Securities; (2) the
aggregate principal amount of such Debt Securities; (3) the percentage of their
principal amount at which such Debt Securities will be offered; (4) the date or
dates on which the principal of such Debt Securities will be payable; (5) the
rate or rates (which may be either fixed or variable) and/or the method of
determination of such rate or rates at which such Debt Securities shall bear
interest, if any; (6) the date or dates from which any such interest shall
accrue, or the method of determination of such date or dates, and the date or
dates on which any such interest shall be payable; (7) the terms for redemption,
extension or early repayment of such Debt Securities, if any; (8) the
denominations in which such Debt Securities are authorized to be issued; (9) the
currencies or currency units in which such Debt Securities are issued or
payable; (10) the provisions for a sinking fund, if any; (11) any additional
restrictive covenants included for the benefit of the holders of such Debt
Securities; (12) any additional Event of Default with respect to such Debt
Securities; (13) whether such Debt Securities are issuable as a Global Security;
and (14) any other term or provision relating to such Debt Securities which is
not inconsistent with the provisions of the Indenture.
One or more series of Debt Securities may be sold at a substantial discount
below their stated principal amount, bearing no interest or interest at a rate
which at the time of issuance is below market rates. Federal income tax
consequences and special considerations applicable thereto will be described in
the Prospectus Supplement relating to any such series of Debt Securities.
The Debt Securities will be unsecured obligations of Ford Credit and will
rank prior to all subordinated indebtedness of Ford Motor Credit Company (parent
company only) and pari passu with all other unsecured and unsubordinated
indebtedness of Ford Motor Credit Company (parent company only).
Except as otherwise provided in the Prospectus Supplement, principal,
premium, if any, and interest, if any, will be payable at an office or agency to
be maintained by Ford Credit in New York City, except that at the option of Ford
Credit interest may be paid by check mailed to the person entitled thereto.
(Form of Security and Sections 10.01 and 10.02).
Except as otherwise provided in the Prospectus Supplement, the Debt
Securities will be issued only in fully registered form without coupons and may
be presented for registration of transfer or exchange at the corporate trust
office of the Trustee. No service charge will be made for any
12
<PAGE> 17
transfer or exchange of the Debt Securities, but Ford Credit may require payment
of a sum to cover any tax or other governmental charge payable in connection
therewith. (Section 3.05).
SUBSIDIARIES
The term "subsidiary of the Company" is defined in the Indenture as a
corporation a majority of the outstanding voting stock of which is owned,
directly or indirectly, by Ford Credit or by one or more subsidiaries of Ford
Credit, or by Ford Credit and one or more subsidiaries of Ford Credit. The term
"Restricted Subsidiary" is defined in the Indenture as a subsidiary of the
Company, incorporated in or conducting the major part of its business in the
United States, any of the activities of which includes insurance underwriting or
which had, at the end of its last quarterly accounting period preceding the date
of computation, assets with a value in excess of $1 million representing
accounts or notes receivable resulting from the financing of new cars, trucks,
tractors and farm and industrial equipment manufactured or sold by Ford or from
the financing of used cars, trucks, tractors and farm and industrial equipment
of the same types, whether manufactured by Ford or others. (Section 1.01). Ford
Holdings, which owns American Road and the other insurance businesses formerly
owned by Ford Credit, is not a subsidiary of the Company and therefore not a
Restricted Subsidiary, as such terms are defined in the Indenture. So long as
stock of Ford Holdings is directly owned by Ford Credit or by a Restricted
Subsidiary, such stock will be subject to the "Limitation on Liens" provision
described below. Ford Credit currently owns its stock in Ford Holdings directly
but is under no obligation to continue to do so.
LIMITATION ON LIENS
If Ford Credit or any Restricted Subsidiary shall pledge or otherwise
subject to any lien (such a pledge or lien is defined in the Indenture as a
"Mortgage") any of its property or assets, Ford Credit will secure or cause such
Restricted Subsidiary to secure the Indenture Securities equally and ratably
with (or prior to) the indebtedness secured by such Mortgage. This restriction
does not apply to Mortgages securing such indebtedness which shall not exceed $5
million in the aggregate at any one time outstanding and does not apply to (a)
certain Mortgages created or incurred to secure financing of the export or
marketing of goods outside the United States, (b) Mortgages on accounts
receivable payable in foreign currencies securing indebtedness incurred and
payable outside the United States, (c) Mortgages in favor of Ford Credit or any
Restricted Subsidiary, (d) Mortgages in favor of governmental bodies to secure
progress, advance or other payments, or deposits with any governmental body
required in connection with the business of Ford Credit or a Restricted
Subsidiary, (e) deposits made in connection with pending litigation, (f)
Mortgages existing at the time of acquisition of the assets secured thereby
(including acquisition through merger or consolidation) and certain purchase
money Mortgages, and (g) any extension, renewal or replacement of any Mortgage
or Mortgages referred to in the foregoing clauses (a) through (f), inclusive.
(Section 10.04).
MERGER AND CONSOLIDATION
The Indenture provides that no consolidation or merger of Ford Credit with
or into any other corporation shall be permitted, and no sale or conveyance of
its property as an entirety, or substantially as an entirety, may be made to
another corporation, if, as a result thereof, any asset of Ford Credit or a
Restricted Subsidiary would become subject to a Mortgage, unless the Indenture
Securities shall be equally and ratably secured with (or prior to) the
indebtedness secured by such Mortgage, or unless such Mortgage could be created
pursuant to Section 10.04 (see "Limitation on Liens" above) without equally and
ratably securing the Indenture Securities. (Section 8.03).
EVENTS OF DEFAULT AND NOTICE THEREOF
Except as may otherwise be provided in an indenture supplemental to the
Indenture, the following events in respect of a particular series of Indenture
Securities are defined in the Indenture
13
<PAGE> 18
as "Events of Default": (a) failure to pay interest for 30 days after becoming
due; (b) failure to pay the principal or premium, if any, for five business days
after becoming due at maturity, on redemption or otherwise; (c) failure to make
a sinking fund payment for five days after becoming due; (d) failure to perform
any other covenants for 90 days after notice; and (e) certain events of
bankruptcy, insolvency or reorganization. (Section 5.01).
If an Event of Default in respect of a particular series of Indenture
Securities outstanding occurs and is continuing, either the Trustee or the
holders of at least 25% in aggregate principal amount of the Indenture
Securities outstanding of such series may declare the principal amount (or, if
the Indenture Securities of such series are Original Issue Discount Securities
(as defined in the indenture), such portion of the principal amount as may be
specified in the terms of such series) of all of the Indenture Securities of
such series to be due and payable immediately. At any time after such a
declaration of acceleration in respect of a particular series of Indenture
Securities has been made, but before a judgment or decree for the payment of
money due upon acceleration has been obtained by the Trustee, the holders of a
majority in aggregate principal amount of the Indenture Securities outstanding
of such series may, under certain circumstances, waive all defaults and rescind
and annul such declaration and its consequences if all Events of Default in
respect of the Indenture Securities of such series, other than the non-payment
of principal due solely by such declaration of acceleration, have been cured or
waived as provided in the Indenture. (Section 5.02).
The Indenture provides that the Trustee shall, within 90 days after the
occurrence of a default in respect of a particular series of Indenture
Securities, give the holders of such series notice of all uncured defaults known
to it (the term "default" to include the events specified above without grace
periods); provided that, except in the case of default in the payment of the
principal of, or premium, if any, on, or interest on any of the Indenture
Securities of such series, the Trustee shall be protected in withholding such
notice if it in good faith determines that the withholding of such notice is in
the interests of the holders of such series. (Section 6.01).
Pursuant to the terms of the Indenture, Ford Credit is required to furnish
to the Trustee annually a statement of certain officers of Ford Credit stating
whether or not to the best of their knowledge Ford Credit is in default in
respect of any series of Indenture Securities in the performance and observance
of the terms of the Indenture and, if Ford Credit is in default, specifying such
default and the nature thereof.
The Indenture provides that the holders of a majority in aggregate
principal amount of all Indenture Securities of a particular series then
outstanding will have the right to waive certain defaults in respect of such
series and, subject to certain limitations, to direct the time, method and place
of conducting any proceedings for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee. (Sections 5.12 and
5.13). No provision of the Indenture requires the Trustee to expend or risk its
own funds or otherwise incur any personal financial liability in the performance
of any of its duties thereunder, or in the exercise of any of its rights or
powers, if there are reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to the Trustee.
MODIFICATION OF THE INDENTURE
With certain exceptions, the Indenture, the rights and obligations of Ford
Credit and the rights of the holders of a particular series may be modified by
Ford Credit with the consent of the holders of not less than 66 2/3% in
aggregate principal amount of the Indenture Securities of such series then
outstanding; but no such modification may be made which would (i) extend the
fixed maturity of any Indenture Security of such series, or reduce the principal
amount thereof, or reduce the rate or extend the time of payment of interest
thereon, without the consent of the holder of each Indenture Security of such
series so affected; or (ii) reduce the above-stated percentage of Indenture
Securities of such series, the consent of the holders of which is required to
modify or alter the
14
<PAGE> 19
Indenture, without the consent of the holders of all Indenture Securities of
such series then outstanding. (Section 9.02).
TRUSTEE
The Trustee may resign or be removed with respect to one or more series of
Indenture Securities and a successor Trustee may be appointed to act with
respect to such one or more series. (Section 6.08). In the event that there
shall be two or more persons acting as Trustee with respect to different series
of Indenture Securities, each such Trustee shall be a trustee of a trust or
trusts under the Indenture separate and apart from the trust or trusts
administered by any other such Trustee, and any action described herein to be
taken by the "Trustee" may then be taken by each such Trustee with respect to,
and only with respect to, the one or more series of Indenture Securities for
which it is acting as Trustee. (Section 6.09).
CONCERNING FIRST FIDELITY
First Fidelity Bank, National Association, Trustee under the Indenture, is
a depositary of Ford Credit, has a committed credit facility available to Ford
Credit and its subsidiaries and has performed other services for Ford Credit in
the normal course of its business.
REPORTS
Ford Credit publishes annual reports, containing certified financial
statements, and quarterly reports, containing interim unaudited financial
statements. Copies of such reports will be available upon request.
PLAN OF DISTRIBUTION
Ford Credit may sell the Debt Securities to or through underwriters, and
also may sell the Debt Securities directly to one or more other purchasers or
through agents.
The Prospectus Supplement sets forth the terms of the offering of the
particular series of Debt Securities to which such Prospectus Supplement
relates, including (i) the name or names of any underwriters or agents with whom
Ford Credit has entered into arrangements with respect to the sale of such
series of Debt Securities, (ii) the initial public offering or purchase price of
such series of Debt Securities, (iii) any underwriting discounts, commissions
and other items constituting underwriters' compensation from Ford Credit and any
other discounts, concessions or commissions allowed or reallowed or paid by any
underwriters to other dealers, (iv) any commissions paid to any agents, (v) the
net proceeds to Ford Credit, and (vi) the securities exchanges, if any, on which
such series of Debt Securities will be listed.
Unless otherwise set forth in the Prospectus Supplement relating to a
particular series of Debt Securities, the obligations of the underwriters to
purchase such series of Debt Securities will be subject to certain conditions
precedent and each of the underwriters with respect to such series of Debt
Securities will be obligated to purchase all of the Debt Securities of such
series allocated to it if any such Debt Securities are purchased. Any initial
public offering price and any discounts or concessions allowed or reallowed or
paid to dealers may be changed from time to time.
The Debt Securities may be offered and sold by Ford Credit directly or
through agents designated by Ford Credit from time to time. Unless otherwise
indicated in the Prospectus Supplement, any such agent or agents will be acting
on a best efforts basis for the period of its or their appointment. Any agent
participating in the distribution of the Debt Securities may be deemed to be an
"underwriter", as that term is defined in the Securities Act, of the Debt
Securities so offered and sold. The Debt Securities also may be sold to dealers
at the applicable price to the public set forth in the Prospectus Supplement
relating to a particular series of Debt Securities who later resell
15
<PAGE> 20
to investors. Such dealers may be deemed to be "underwriters" within the meaning
of the Securities Act.
If so indicated in the Prospectus Supplement relating to a particular
series of Debt Securities, Ford Credit will authorize underwriters or agents to
solicit offers by certain institutions to purchase Debt Securities of such
series from Ford Credit pursuant to delayed delivery contracts providing for
payment and delivery at a future date. Such contracts will be subject only to
those conditions set forth in the Prospectus Supplement and the Prospectus
Supplement will set forth the commission payable for solicitation of such
contracts.
Underwriters and agents may be entitled, under agreements entered into with
Ford Credit, to indemnification by Ford Credit against certain civil
liabilities, including liabilities under the Securities Act.
LEGAL OPINIONS
The legality of the Debt Securities offered hereby will be passed on for
Ford Credit by J. D. Bringard, Esq., Vice President--General Counsel of Ford
Credit, or other counsel satisfactory to any underwriters or agents, and for any
underwriters or agents by Shearman & Sterling, 599 Lexington Avenue, New York,
N.Y. Mr. Bringard is a full-time employee of Ford Credit and owns and holds
options to purchase shares of Common Stock of Ford. Shearman & Sterling act as
counsel to the Compensation and Option Committee and the Audit Committee of the
Board of Directors of Ford and occasionally act as counsel to Ford and Ford
Credit in connection with certain transactions.
EXPERTS
The financial statements which are incorporated in this Prospectus by
reference to the 1993 10-K Report have been audited by Coopers & Lybrand L.L.P.
("Coopers & Lybrand"), 400 Renaissance Center, Detroit, Michigan 48243,
independent certified public accountants, to the extent indicated in their
report therein, and have been so incorporated in reliance upon the report of
that firm, given on their authority as experts in accounting and auditing, which
report includes an explanatory paragraph indicating Ford Credit changed its
methods of accounting for postretirement healthcare benefits and income taxes in
1992.
With respect to the unaudited interim financial information of Ford Credit
for the periods ended March 31, 1994 and 1993, June 30, 1994 and 1993, and
September 30, 1994 and 1993, included in the First Quarter 10-Q Report, the
Second Quarter 10-Q Report and the Third Quarter 10-Q Report, respectively,
incorporated by reference in this Prospectus, Coopers & Lybrand have reported
that they have applied limited procedures in accordance with professional
standards for a review of such information. However, their reports included in
the First Quarter 10-Q Report, the Second Quarter 10-Q Report and the Third
Quarter 10-Q Report state that they did not audit and they do not express an
opinion on that interim financial information. Accordingly, the degree of
reliance on their reports on such information should be restricted in light of
the limited nature of the review procedures applied. The accountants are not
subject to the liability provisions of Section 11 of the Securities Act for
their reports on the unaudited interim financial information because each such
report is not a "report" or a "part" of the registration statement prepared or
certified by the accountants within the meaning of Sections 7 and 11 of such
Act.
16
<PAGE> 21
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS SUPPLEMENT AND THE
PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO
BUY ANY SECURITIES OTHER THAN THE SECURITIES DESCRIBED IN THIS PROSPECTUS
SUPPLEMENT OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH
SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.
NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS NOR ANY
SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THE INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT AS OF
ANY TIME SUBSEQUENT TO THE DATE OF SUCH INFORMATION.
------------------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Description of Notes................. S-2
Underwriting......................... S-4
PROSPECTUS
Available Information................ 2
Incorporation of Certain Documents by
Reference.......................... 2
Information Concerning Ford Credit... 3
Ford Motor Credit Company and
Subsidiaries -- Selected Financial
Data............................... 4
Information Concerning Ford.......... 7
Selected Financial Data and Other
Data of Ford....................... 8
Financial Review of Ford............. 9
Industry Data and Market Share of
Ford............................... 10
Use of Proceeds...................... 10
Ratio of Earnings to Fixed Charges... 11
Description of Debt Securities....... 11
Plan of Distribution................. 15
Legal Opinions....................... 16
Experts.............................. 16
</TABLE>
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$500,000,000
FORD MOTOR
CREDIT COMPANY
8.20% NOTES
DUE FEBRUARY 15, 2002
------------
(FORD LOGO)
------------
GOLDMAN, SACHS & CO.
BEAR, STEARNS & CO. INC.
CITICORP SECURITIES, INC.
MERRILL LYNCH & CO.
PAINEWEBBER INCORPORATED
SMITH BARNEY INC.
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